The head of internal audits at the Public Investment Corporation, Lufuno Nemagovhani, on Wednesday detailed how the state-run asset manager's R4.3bn acquisition of shares in AYO Technology Solutions was approved without following due process, describing the process as an anomaly.
The PIC, Africa's largest asset manager, invests on behalf of the Government Employee Pension Fund and four smaller state-run funds, including the Unemployment Insurance Fund.
Nemagovhani testified before the commission of inquiry investigating the company that the AYO transaction was signed off before it could be presented to the PIC's portfolio management committees.
"The subscription form was signed off on 14 December and confirmed with the listing agent before the approval of the transaction by the PMC on 20 December, 2017," he said.
"I have never anything like this before," he added. "It was signed off before the delegated committee could approve," he added.
Evidence leader Advocate Jannie Lubbe asked Nemagovhani if this was in breach of due process. He responded "yes it is".
On Tuesday, the PIC said a preliminary forensic report into the AYO deal "clearly reflects a blatant flouting of governance and approval processes of the PIC".
Based on the findings of the report, the PIC board suspended its Executive Head of Listed Investments Fidelis Madavo and Assistant Portfolio Manager Victor Seanie with immediate effect.
AYO did not reply to a request for comment sent via its website on Tuesday. The group does not have an up-to-date contact number on its website.
Fin24 will update this article with comment from AYO when it arrives.